At its core, trading forex is an activity that requires an analytical approach. A great deal of emphasis is placed on the practical aspects of execution and the different patterns traders exploit for potential profit.
One often overlooked aspect is analyzing the overall results for a trading account. Journaling is one method for achieving this goal, but a more intricate and sophisticated approach is using a trade analytics platform.
Such applications track the progress of an account and offer critical metrics providing an idea of what someone is doing right and where they could potentially improve.
What is a trade analytics platform?
These applications are browser-based tracking tools for users to link their trading account and display a myriad of verified performance data. This includes information on the overall P&L, age of the account, equity, risk of ruin, commission and swaps totals, drawdowns, return and win-loss percentages, MFE/MAE, and so on.
For those who understand investing lingo, such platforms can also provide other data like the Sharpe, Sortino, and Omega ratios, profit factor, annualized volatility, etc.
Such applications automatically update this evidence regularly (usually every few minutes) and essentially detail every action taken on the account like deposits, withdrawals, opened and closed positions.
With this much detail, users gain a blow-by-blow view of how their accounts are doing in real-time. These programs are probably the most electronic way of keeping track of performance, verified to be accurate with no manipulation.
How do trade analytics platforms work?
Users log into the service with a username and password created at the sign-up stage. The process involves syncing an existing demo or live account to the application. Most platforms allow traders to link several accounts under one roof into a portfolio and benefit from the same instantaneous updating.
Once the accounts have achieved full syncing, the application will display all the data and update it accordingly when a new action like an opened trade or deposit occurs. Notably, the application will also prove if the account is a demo or live.
When the user wishes to share their performance with other viewers, they use their read-only or investor’s password, permitting anyone to see the trader’s account without making any changes to it.
Why should more traders use analytics platforms?
Surprisingly, most of these applications are free of charge. Below are some of the benefits such tools provide for any forex trader.
Observing crucial statistics
One of the key advantages of an analytics platform is its ability to display all the crucial information about your account. For instance, the profit factor metric looks at the gross profit divided by the gross loss. If this figure is above 1, it’s a good sign of profitability.
Another example is looking at the size of the average win against the average loss, i.e., the risk to reward. By looking at the actual numbers, a trader receives accurate feedback on whether they are adhering to intended targets and where they might need to reduce or increase the risk.
These are just some of the many ways these platforms are beneficial.
Looking at trading costs
Some of these applications can also show how much someone is paying in commissions and swaps. If the trader feels this is too much, they can compare with other brokers for a better deal.
Other viewers can authenticate whether someone’s results are real or not. In an environment where transparency is low, these platforms show the actual, unalterable results.
Secondly, some brokers and financial firms looking to fund other traders will use such applications to test if they are sticking to the required metrics. Also, some services like FX Blue allow users to run their own competitions providing access to a public leaderboard.
Three best platforms to use in forex now
Let’s look at the three most popular applications in forex for analyzing results.
Myfxbook is one of the most popular forex trading portals and social networks on the internet. One of their many services is a free analytics tool providing the advanced statistical capabilities serious traders expect.
Traders can create different portfolios for separate accounts and publish their statements on the platform as a form of résumé for their skills. Myfxbook supports cTrader, MT4, MT5, TradingStation (FXCM), and OANDA fxTrade.
Previously known as MT4i, FX Blue is one of the staples in the industry for analyzing and letting traders publish their trading results for free. It supports a range of recognized software packages, namely, MT4, MT5, cTrader, Vertex FX, FXCM TS2, and xOpenHub.
Users can export deep statistics about their accounts on an Excel spreadsheet for further analysis. FX Blue also allows users to embed their real-time results as widgets on their websites.
PsyQuation is perhaps one of the most advanced analytics services despite being somewhat less familiar. The bespoke application is AI-driven with the aim of providing analytics and workable insights for result improvement.
One of PsyQuation’s unique features is its proprietary scoring algorithm measuring a trader’s behavior, history, risk, and skill. With this score, users can compare against tens of other traders globally, which is also used for funding traders with Axi’s capital funding program, AxiSelect.
PsyQuation can currently only accommodate MT4 accounts.
For any trader looking to visualize their performance intensely, analytics platforms are a must. A successful trader quantifies their progress using understandable statistics to observe good and bad habits.
Best of all, many of these applications are free of charge and easy to use. They can also serve as a legit form of a portfolio for any trader looking to get more capital from other investors or prop firms and run trading contests.